Fast forward to today, and it looks like Google is now attempted to aid mom & pop shops. Here is a search on the keyword "flowers:"
I live in California so it appears Google is reading my IP address and populating local results in apropos. However, if I click on “change location” above the local algorithm is removed and replaced with a field box with the option to enter a new location. So if I wanted to locate a particular Baltimore Florist or just look for funeral flowers in a particular area, I would change the field box to populate that areas florists. This is a different from the usual text in the upper right corner that says: "Customized based on recent search activity." In that circumstance, a simple refresh removes the customization. But this in not the case in the new algorithm, you actually have to physically click "change location."
Also, the local listings seem to be from areas *near* my IP address location but not directly *in* my IP address area. If Google could just perfect that element to populate truer local listings this algorithm will be a breakthrough in favor for the local florist.